SAP’s Preliminary Results Indicate A Strong Q4

by Trefis Team
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Software corporation SAP AG (NYSE:SAP), released its preliminary financial results for Q4 2012 and FY 2012 on 15 January and reported a 12% increase in revenues year-on-year. The highlight of the year was SAP HANA, which showed triple digit growth to $515 million (Euro 390 million). [1] SAP Sybase ASE, SAP Sybase IQ, SAP Sybase SQL Anywhere and SAP HANA revenues led to the growth, mainly driven by the addition of SAP HANA into its database product portfolio.

Software and services revenue jumped 9% y-o-y to $5.6 billion (Euro 4.23 billion) while cloud subscriptions and support grew 20 times to $166 million (Euro 126 million). Full year 2012 revenues came in at $21 billion (Euro 16.2 billion), up 17% y-o-y.


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Big Data Driving SAP Growth

Big Data is the largest growth opportunity for SAP and it exceeded its target revenue from HANA of Euro 320 million ($422 million). The SAP HANA platform and solutions from Sybase help organizations unlock the business value of ‘Big Data’, by enabling them to access and deliver information faster than before with real-time insights. SAP also claims that the HANA platform can deliver information up to 1,000,000 times faster than before due to its in-memory computing. [2]

Cloud-Based Management Apps Becoming Popular

To strengthen its cloud-based product portfolio and to compete with the likes of Salesforce.com, SAP is now set to unveil a line of cloud-based enterprise performance management (EPM) applications that use HANA as the base platform. The pricing for apps will be on a subscription basis and will depend on the complexity of the management app and the customer’s enterprise size. [3]

The cloud based management apps such as EPM OnDemand, include capabilities to investigate and fix errors related to expenses, and it allows for real-time analysis of P&L and capital project planning. The company expects to release more products in the future with a design focus on smartphones and tablets. EPM Unwired, is one such app, and is a mobile client that will serve as a launch pad for all of SAP’s EPM software. The focus on mobility is to cater to the sales force, which is always on the move and for professionals such as retail managers, who spend a lot of time away from their desks and need mobile access.

We currently have a $74 Trefis Price Estimate, which is slightly below market price. Since this is preliminary result, we will update our price estimates once the complete results are released by SAP, later this month.

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Notes:
  1. SAP Announces Preliminary Q4 2012 Results, www.sap.com, Jan 15, 2012 []
  2. SAP Becomes Fastest-Growing Vendor in Relational Database Management Systems Market, www.sap.com, June 8, 2012 []
  3. SAP Unveils HANA Powered Management Apps, www.pcworld.com, Sept 10, 2012 []
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